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Wire-transfer fraud poses a growing problem

Posted on September 29, 2010 by Dissent

Doreen Hemlock filed this report last week:

Identity theft takes many forms, but Lenny Vigliotti never imagined it would show up as somebody wiring $12,000 from his South Florida saving account through multiple banks to end up in the Ukraine.

Nearly three months after he noticed the money missing, he’s yet to recoup the cash. As investigations proceed, he’s found out there’s a chance he may never get those savings back either.

Rules governing wire transfers place a larger burden on account holders than laws on credit cards or debit cards, Vigliotti has learned. And his Fort Lauderdale bank says he may not have met required security requirements on his computer system — even though he has secured wireless, firewalls, anti-virus software and other protection — and so, the bank may not be liable to pay him back.

“They say someone got into my computer, not their system,” said Vigliotti, a Hollywood resident. “But my point is: If you know fraud is a problem, and you see an account that has never had wire-transfers before, how do you let someone with a fax take out thousands of dollars without checking? All they needed to do was call me and ask: Are you applying for wire transfers? And I would have said: What are you talking about?”

Read more in the Orlando Sentinel.

I’m not sure why the reporter didn’t name the bank.   Isn’t it newsworthy and wouldn’t other bank customers want to know that this is how the bank responds to its customers?  Did the bank do enough to authenticate before making the transfer?   The customer says ‘no,’ and many of us would likely agree with him:

The bank said it had received an authorization by fax to withdraw the money with a signature, phone number and fax number, which Vigliotti said were not his.

Category: Breach IncidentsFinancial SectorID TheftOtherU.S.

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